Strategic planning is an organization’s process of defining, often in hyperbolic terms, its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. Various business analysis techniques can be used in strategic planning, including SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats ), PEST analysis (Political, Economic, Social, and Technological), STEER analysis (Socio-cultural, Technological, Economic, Ecological, and Regulatory factors), and EPISTEL (Environment, Political, Informatic, Social, Technological, Economic and Legal).
Strategic planning is the formal consideration of an organization’s future course. All strategic planning deals with at least one of three key questions:
- “What do we do?”
- “For whom do we do it?”
- “How do we excel?”
In business strategic planning, some authors phrase the third question as “How can we beat or avoid competition?” (Bradford and Duncan, page 1). But this approach is more about defeating competitors than about excelling.
In many organizations, this is viewed as a process for determining where an organization is going over the next year or—more typically—3 to 5 years (long term), although some extend their vision to 20 years.
In order to determine where it is going, the organization needs to know exactly where it stands, then determine where it wants to go and how it will get there. The resulting document is called the “strategic plan.”
While strategic planning may be used to effectively plot a company’s longer-term direction, one cannot use it to reliably forecast how the market will evolve and what issues will surface in the immediate future. Therefore, strategic innovation and tinkering with the “strategic plan” have to be a cornerstone strategy for an organization to survive the turbulent business climate.